There is new energy in the Fijian property market with developers returning after a decade-long hiatus.
In Fiji, in the mid-1990s and again from 2003-2006, there were a number of mainly leisure-orientated managed apartment developments released to the Fiji, New Zealand and Australian markets.
Investors seeking a holiday apartment with the added bonus of potential income earning capability snapped up Denarau resort apartments eagerly.
This investment facilitated a boost in the inventory of rooms to support growth in tourism numbers.
They bought up apartments in the Sheraton Denarau Apartment complex, the Denarau Beach Resort and Spa (now renamed the Radisson Blu Denarau), the Fiji Resort and Spa (now the Hilton Denarau), and Golf Terraces close to the Port Denarau retail and commercial centre.
Then, Fiji went through a period of political change and consequential uncertainty and the global financial crisis hit.
It was the global crisis which impacted most on the Fiji development market.
Relatively low debt levels in Fiji meant that the country was somewhat insulated from world events and the local property market was quite active with investors here buying up opportunities.
However offshore developers and investors were very nervous about the impact the global financial crisis would have on their own economies and businesses.
As the world caught its breath, and some sense or normality returned, here in Fiji the general election in 2014 injected further new confidence in this nation both within Fiji and further afield.
The developers, most of whom have until now been Fiji based, are looking not only to capture the imagination of local Fijian investors and new home owners, but also that of leisure investors in New Zealand, Australia and Asian nations.
There is another group also being tempted back into the Fijian property market – the multitude of Fijians living in Canada, the United States, New Zealand and Australia who chose to seek new pastures during more difficult times but who are now looking to invest back in their homeland.
Government policies have impacted significantly on the dynamics of the Fiji residential property market.
Since the end of 2014, non-Fiji residents have been unable to purchase freehold or Crown lease residential homes within the town and city boundaries of urban Fiji.
They can, however, buy strata-titled residential property and Native leasehold residential.
There are exceptions where zoning is Special Use Tourism Villas rather than Residential.
There has also been the introduction of legislation which requires non Fijians who buy residential land on which they plan to build homes, to complete construction within two years of purchase.
Further, non-Fijians who have purchased undeveloped residential lots in the past were also required to complete homes by the end of 2016, or face penalties for defaulting on that requirement.
The impact of this legislation has been dramatic in some specific areas, for example in a Taveuni development where in 2010 residential home sites which were offered at around US$95,000, and where similar lots are now being sold by offshore based owners for a fraction of the original purchase price.
The increase in Stamp Duty to 10 per cent on residential property for non-Fijians has impacted on the sale of particularly the top end of the luxury home market.
Sales of homes on Denarau Island, for example, have slowed significantly.
The opportunity for expatriate Fijians to hold dual citizenship also means those who gave up the Fijian citizenship previously can now re-apply and if successful, qualify for residential ownership in areas off-limits to non-Fijians.
Until relatively recently, there have been few property opportunities to draw investors and owner-occupiers back into the market.
Naisoso Island close to Nadi is an exception, as is Vunabaka in the Mamanuca island group.
Thankfully, that is changing and development sites are being proactively pursued and acquired by savvy developers with a view to developing new home lots and apartments.
Much of this new momentum is Fiji-domiciled and initiated, with leading Fiji business entities entering the property development market, across all sectors.
Developers based outside of Fiji are also putting the Pacific nation on the “shopping list” again.
Originating from New Zealand, Australia and Asia, they recognise that the inherent fundamentals that Fiji boasts will resonate with both Fiji residents and off-shore investors looking to secure new opportunities.
This includes residential, commercial, retail, industrial and resort-style managed leisure investment developments, with a prime focus on the tourist hub of the Western Division around Nadi and Denarau, and in Fiji’s capital, Suva.
The demand for additional inventory to accommodate growing tourism numbers will be taken up in part by these new developments.
Philip Toogood of Bayleys says: “As momentum has increased, popular destinations outside of the main areas – such as the Yasawa and Mamanuca Island groups, the Coral Coast, Pacific Harbour and in and around Savusavu on the country’s second largest island Vanua Levu – have also seen a significant lift in developer interest and focus”.
A quick look at some of Bayleys Fiji’s current projects:
- Palm Beach is a mixed-use residential, commercial, retail and resort development in Wailoaloa, Nadi Bay. Sales have been brisk across the board, with all but a handful of residential lots now sold – mostly to local investors and new home owners. The developers herald from both Fiji and Sydney in a joint venture.
- Denarau Waters, part of Denarau Island, has also been quickly taken up, again mostly by local Fijian buyers with just a handful of offshore buyers including a complete residential waterfront precinct of 24 home lots which has been secured by a Hong Kong based investor. The first precinct, Herons Reach, is due for completion and settlement shortly. The second precinct is well advanced.
- Nasese Waters, Suva Stage One is a gated residential enclave close to the Suva waterfront and CBD. Local investors have been quick to appreciate this new lifestyle community opportunity which has a resident’s club house, pool and full security.
- Significant new strata-title residential and managed apartment developments are planned for Wailoaloa Beach, Nadi, Denarau, the Suva foreshore and the Suva CBD.
Targeted buyers include the local market of Fiji, non-Fijians who are permitted to buy strata-titled property in Fiji, and expatriate Fijians living abroad and we see this group as providing a strong buyer base.
Bayleys has recently signed agency agreements for 150 residential apartments on MacGregor Road Suva, which is currently under construction, and a mix of 200 apartments and stand-alone villas on Wailoaloa Beach Nadi.
Marketing campaigns designed to encourage a fresh wave of leisure investors from New Zealand and Australia who want to spend holidays with family and friends in their own properties – rather than in conventional resort-style accommodation – are expected to grow the potential buyer base.
The local market will also see the opportunity to invest in property now, with completion two and three years out.
Similar campaigns focusing on Fijian expatriates abroad are also planned.
In our experience, some of those being targeted will want solely income-generating property, while others will be looking for more flexibility with longer personal use period built in.
Pricing thresholds are critical when new developments are considered.
Developers are cognisant of the need to offer good quality at an affordable and competitive price.
The Fijian property market is becoming more sophisticated and the growth in the economy is impacting positively on the ability of Fijians to invest both in their own new homes and income earning property.
Fiji’s physical credentials of beauty, compact size, sun, sand and pristine waters and a growing economy will underpin this new property development wave and give further impetus to our expanding economy.
This article was originally published in the Fiji Sun on March 17 2018.